Nvidia reportedly agrees to buy Hugging Face for $12.9B

Nvidia has agreed to buy Hugging Face for $12.9 billion, The Information reported Wednesday night. Business Insider, which broke the story over the weekend, added that the talks had not yet produced a signed agreement and could still fall apart. Neither Nvidia nor Hugging Face confirmed the deal.

The price marks a steep climb from Hugging Face's last known valuation. In 2023 the company raised $235 million in a round led by Salesforce Ventures that valued it at $4.5 billion. Nvidia was in that round too. Late last year, Hugging Face turned down a $500 million investment offer from Nvidia that would have put it at $7 billion, telling the Financial Times it did not want a dominant investor that could sway its decisions.

Why Nvidia wants it

The strategic logic runs in several directions at once. The most direct: protecting the chip business. Every major closed-source AI lab (OpenAI, Google, Amazon, Anthropic) is now building or expanding custom silicon to reduce dependence on Nvidia hardware. A thriving open source model ecosystem gives customers alternatives to those closed labs. More of them sticking with open weights keeps compute demand pointed at Nvidia's GPUs. Nvidia has already invested tens of billions in its own open source model efforts, and owning the most popular hub for model sharing puts it at the center of that pipeline.

The second thread is cloud. Nvidia reportedly scaled back its DGX Cloud unit about a year ago. Hugging Face already lets developers run models on rented compute. According to The Information, acquiring the platform would hand Nvidia a re-entry into cloud without rebuilding from scratch. There is also a hedging angle: Nvidia has promised to underwrite tens of billions in cloud commitments for customers. If those customers draw down less than they signed up for, owning Hugging Face gives Nvidia a place to resell that idle capacity.

The Delangue factor

Hugging Face CEO Clem Delangue spent much of 2026 publicly aligned with Nvidia's open source push. In a CBS "Face the Nation" appearance earlier this month he described how Hugging Face used an Nvidia-modified version of a Chinese open source model to defend against a cyberattack, and pointed to a letter signed by Jensen Huang and 24 other companies urging the U.S. government to support open models rather than restrict them. In a separate CNBC interview in late July, Delangue cited that same letter while warning that China is "clearly dominating" open source AI.

What it means for the ecosystem

Hugging Face's revenue is growing fast, but it is still small. The Information reported the company was generating roughly $150 million a year, up from about $100 million two months earlier. Delangue told TechCrunch in July that the company was "close to profitability." A price near $13 billion is a massive multiple for a company that size, but it is hard to walk away from.

The timing also sits against a broader pattern of consolidation in AI infrastructure. Stripe reportedly paid more than $7 billion to acquire OpenRouter earlier this month, a startup that had been valued at $1.3 billion during its Series B just weeks before. If you build on open source models or use Hugging Face to manage deployments, the practical question now is whether the terms get signed. Until then, this remains reporting, not an announcement.